Oil prices saw an uptick in Asian trade on Monday, continuing the upwards trend from last week when prices rose nearly 4 per cent due to tightening supply, according to Reuters.
The situation is exacerbated by ongoing attacks on Russian energy infrastructure, which have added a risk premium of $2-$3 per barrel to crude prices.
Brent crude oil futures for May delivery rose by 32 cents, or 0.4 per cent, to $85.66 a barrel. US West Texas Intermediate (WTI) crude for April delivery increased by 40 cents, or 0.5 per cent, to $81.44, while the more active May contract traded 37 cents higher at $80.95 per barrel.
The weekend saw further attacks on Russian refineries, including a brief fire at the Slavyansk refinery in Kasnodar, which processes 8.5 million metric tonnes of crude oil annually. These attacks have reportedly idled around 7 per cent of Russian refining capacity in the first quarter.
Investors await the US Federal Reserve’s meeting outcome on Wednesday for potential interest rate cuts. Lower rates could boost demand in the US, the world’s top oil consumer, thus supporting oil prices.
Despite a dip on Friday, both benchmark oil contracts posted gains last week. A bullish demand report from the International Energy Agency (IEA) sent prices to their highest level since November.
The IEA has strengthened its demand outlook for the fourth time since November and predicted a slight supply deficit this year for the first time.
As of Friday’s close, Brent and WTI futures were up 11 per cent and 13 per cent, respectively, in 2024.
